Soybean prices top $10 per bushel

By Bonnie Jo Hanson

Soybeans prices topped $10 per bushel last week, nearly twice their price a year ago.

The cash price for a bushel of soybeans last week was $10.16, while in March 2003 the price was $5.76.
Soybean prices have been below $6.50 per bushel for at least three years, with the price holding at just north of $5 per bushel through most of 2002 and 2003. The price began climbing late in 2003 and hit $10 in mid-March.

Celestine Fischbach, manager of the Regal Elevator, can't remember ever paying $10 for soybeans. In 1988, when a drought hit the midwest, prices were high, he recalled, but not this high.

But $10 cash soybeans don't mean a lot to farmers who don't have soybeans to sell, added Fischbach. Some of his customers sold beans last week, but most don't have any left to sell.

A sparse soybean crop last summer, due in part to drought and in part to soybean aphids, while helping the price, left many local farmers without a large surplus of beans.

A shortage of soybeans nationwide - because of low yields both domestically and in South America - has helped boost prices. According to a USDA report released last week, soybean stores in the United States were down over 25 percent, the lowest in recent history, said Dan Martens, an extension educator in Stearns County.

And while soybean supplies are low, demand has remained high. Usually, when soybean prices climb, the food industry switches from soybean oil to other oils, but this hasn't happened this year, said Martens.

Demand is also higher because of last year's Mad Cow disease scare, which reinforced regulations prohibiting putting animal by-products in animal feed. Producers compensated for the loss of animal protein by adding soy protein to their rations, further stressing the supply of soybeans.

Individually, these factors would not account for the high prices, but together, the price has been forced higher than many farmers can remember, said Martens.

Even if they have no soybeans to sell now, farmers could still benefit from the higher prices by pre-selling some of their 2004 crop. This practice has its own risks, though, especially if a farmer is unable to fulfill his contract because of a poor crop, said Fischbach.

While futures prices remain high in the short term - $10.45 for May - the bid price for new beans in November was down to $7.88 per bushel as of Friday.

According to Martens, pre-selling beans is a good option for farmers, because the price is still considerably higher than historically, but he doesn't see soybean producers jumping up and down celebrating. While $7.88 is an excellent price for soybeans, producers will spend considerably more this year producing their crops and won't likely see a huge profit. With high gas prices, soybean producers will spend more this year on fuel costs for planting and harvesting their crops and for drying their beans, said Martens.

Also, soybean aphids - which can lower yields - are expected in area fields again in 2004, so producers may spend more on pesticide applications, added Martens.